Learning from the secular “non-death care” world

January 27, 2021/Business/

I’ve always had this habit of looking at a statement of fact, tried to look behind the numbers, and then tried to figure out how what I learned or discovered might help me in my funeral home business. When I operated my funeral business, I was concerned about giving great service to my client families, but I was also concerned about making profits. . . .because doing so allowed me to add amenities and features to my business that competitors could not afford to have.

It was a great situation to get into. . . .the more I had to offer, the more clientele it pulled in, and with those profits I could offer more and the cycle just kept repeating itself.

I lived the business 24/7 and there was a time when my wife told me that she would bury me with a calculator in my hand. . . .For what it is worth, I took that as a compliment.

The other day I saw an article how some of America’s quick service restaurants (QSR – what we used to call “fast food” places) were adding more chicken to their menus. Shake Shack was adding Korean style chicken, McDonald’s was adding “Chicken McGriddle’s”, and even KFC was adding the new “Best Chicken Sandwich Ever”.

It was pointed out that at QSR restaurants, beef still outsells chicken 3 to 1. However, in American homes, poultry in 2020 outpaced beef taking a 50.2% market share of the combined markets. Back in 1960 that poultry only had a 20.4% market share and even 40 years ago in 1980, poultry only had a 30.6% share of the market.

The relatively slow ascent of poultry and descent of beef reminded me of the cremation/burial markets. It was somewhat remarkable when I looked at the consistency of the two differing consumer products — death and food. Here is a chart of the yearly per capita consumption of poultry and beef.

Then I did some wondering and research on what quick service restaurant in the United States has the highest sales per store. While I found out that there were five chains that did over $10 billion in sales — McDonald’s, Subway, Starbucks, Taco Bell, and Chick-fil-a — Chick-fil-a was the huge winner in per capita sales at a rate of $4.167 million per store to 2nd place McDonald’s at $2.76 million per store. The next two, with a minimum of 1000 stores, were Panera at $2.74 million per store and Chipotle at $2.00 million per store.

I found it interesting that the company, Chick-fil-a , that got in on the trend moving in its direction — poultry choice over beef — was now the leader in sales. I found it interesting and wondered if the trend I see for Direct Cremation over other forms of disposition may lead to a similar pattern over time for firms that specialize in Direct Cremation. Just an interesting observation by me.

I also found another article that was interesting to me. The article pointed out that there were over 45,000 Shell gas station retail sites in the United States. That’s more than McDonald’s (39,000) and Starbucks (32,000). And, Shell is planning to open another 10,000 sites in the next five years — all when it appears that electric vehicles are on the upside and gasoline margins are disappearing.

It turns out that gasoline is not the big money maker for Shell. It is your stop where you load up on snacks and beverages that really rakes in the profit for the company. Those profit margins are much higher than gasoline and all that coffee sold every morning brings a high margin to the bottom line. A couple million cups of coffee sold every morning at $0.99 cents with a $0.15 cost per cup can bring in lots of profits!!

In essence, the company plans to be there to help you put gas in your car and possibly offer electrical charging stations in the future, so they can really move high margin items to you on your stop.

That made me wonder. . . . as funeral and cremation prices seem to get more competitive. . . .what can funeral homes offer in higher margin sales to profit off the clientele who comes to you. Will lifestyle options — such as lawn care, snow shoveling, grocery delivery, or other items be offered in a monthly pay “lifestyle” option to clientele who have maybe pre-arranged with you? Is there a profit in offering that? Is there goodwill in offering something like that? Is there a viable business in offering something like that?

Maybe the funeral director that is ahead of the trends will check into it.

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